Sarkozy's modest financial tax has political aims
* French president promises 'shockwaves' with stocks tax
* Signals 0.1 pct transactions levy from Aug 1
* Gesture mostly political, say observers
* May force Germany to follow suit - analyst
PARIS, Jan 30 (Reuters) - French President Nicolas Sarkozy promised "shockwaves" with a unilateral tax on some financial transactions, but the modest levy his government outlined on Monday was viewed as a political gesture that will cause few market ructions.
With the first round of presidential polls three months away, Sarkozy launched a raft of proposals designed to shore up France's budget deficit, improve competitiveness and make the financial sector share the burden of the crisis.
In the absence of an EU-wide agreement, he said on Sunday he would implement the 0.1 percent financial transactions tax on trading in stocks, but not until Aug. 1.
He also said he would impose special levies on naked credit default swaps - or debt insurance not backed by ownership of the underlying debt - and high frequency trading.
"What we want to do is create a shockwave and set an example that there is absolutely no reason why unregulated finance, those people who helped bring about the crisis, shouldn't pay to restore the our accounts," he said in a televised address.
One analyst said he expected the measure to cause little more than ripples among traders and investors.
"This is more a political and psychological shock than a financial one ... It is first of all a political gesture," said Dominique Barbet, head of market economics at BNP Paribas.
"It seems this is going to be a kind of stock market tax, in which case it should be relatively painless... It could hit high frequency trading, but I'm not sure that's large part of the market."
Pollsters say the tax is overwhelmingly popular with French voters on both sides of the political spectrum, who are opposed to what they consider to be the excesses of unregulated capitalism.
If Sarkozy is not reelected in a May 6 second-round vote, Socialist frontrunner Francois Hollande has vowed to press ahead with his own version of the tax if he wins office.
FORCING GERMANY'S HAND?
France failed garner support when it presented its blueprint for the tax to EU finance ministers last week in Brussels.
But Sarkozy's decision to press ahead alone with the share tax - even though, unlike an EU proposal, he will place no levy on bond trading - may force the hand of Germany, which has said it favours a financial tax.
"Sarkozy's decision to introduce this tax unilaterally in France is a sign of absolute desperation. Which is why (German Chancellor Angela) Merkel has to stop talking about it and act," Sigmar Gabriel, head of Germany's opposition Social Democrats, told German radio.
The prime minister's office said on Monday the tax would be levied on the transfer of stocks quoted in Paris, regardless of the location of the buyer and seller.
It said the tax would raise 1 billion euros a year to be used to trim France's budget deficit in the face of slowing growth this year. That is just one-third of the 3 billion euros raised by Britain's stamp tax on share trading in the year to April 2011.
The head of France's AMF stock market regulator, Jean-Pierre Jouyet, warned last week that the tax would hit French asset managers.
A spokeswoman for the NYSE Euronext exchange said it was premature to comment on the tax ahead of a Feb. 8 cabinet meeting to finalise its details.
"The goal is not to ruin people, it's just to share out the effort and show that everybody has to contribute," the head of Sarkozy's ruling UMP party Jean-Francois Cope told Reuters. "It's a political goal. It's a way to say everybody is contributing to deal with the crisis."
(Reporting By Daniel Flynn; Editing by John Stonestreet)
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